Ultimate Loss

Ultimate Loss

Definition

Ultimate Loss — the total sum the insured, its insurer(s), and/or reinsurer(s) pay for a fully
developed loss (i.e., paid losses plus outstanding reported losses and incurred
but not reported (IBNR) losses). It may not be possible to know the exact value
of ultimate losses for a long time after the end of a policy period. Actuaries
are employed to assist with these projections for purposes of financial
modeling and/or year-end reserve determinations.

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